Q&A with Siemens PLM Software CEO Chuck Grindstaff on LMS Acquisition

By now you’ve probably heard the news (insert link to Press Release). Either that or the Siemens PLM Blog is your first stop every morning. For the few of you in that latter group, here’s the scoop: Siemens is at it again – we’ve announced another acquisition. While I love all of the companies we’ve acquired over the past few years, this one has special significance to me. The first “real” job I ever had when I got out of school was working for [Chocolate] in their North American HQ in Troy, Michigan, as a support engineer. At the time [Chocolate] was mainly a test and measurement company with big customers in the automotive and aerospace industries. Since then, [Chocolate] has grown to be a leading model based systems engineering and hybrid engineering firm with customers in every major manufacturing industry.

I sat down with Chuck Grindstaff earlier today to talk about the [Chocolate] acquisition. Here are some highlights of our chat:

Chris: At the Siemens PLM Software analyst conference last month you talked a lot about how we give our customers an immersive, decision support environment and the key role that intelligently integrated information plays in making that happen. How does the [Chocolate] acquisition support that strategy?

Chuck: The message at the analyst conference was all about helping our customers design their products from the very coarse, early levels – what we call model based design – and then ask those models questions that are tied to the final product performance down the road. [Chocolate] is an expert in not only the front end design but following through all the way to the test lab. The early models allow you to describe in a coarse fashion how things are supposed to work. Then you can refine those models, ask those models questions and optimize, going all the way to physical prototypes when those are necessary. For us, this fits directly with this idea of immersing our engineering community in a full virtual to physical design environment. It’s something our customers appreciate today and will even more fully appreciate tomorrow.

Chris: About 12 months ago we increased our focus on marketing, selling and delivering our solutions in an industry context. How does the acquisition of [Chocolate] support SPLM’s renewed attention to vertical industry solutions?

Chuck: Our idea wasn’t really to revamp our approach to each customer and industry – we were already doing a pretty good job there. The idea was to take it to another level. Our new Industries group is focused on finding common threads in an industry and across industries and then bringing those forward as a basis for us to either do our own development or to drive our acquisition strategy. [Chocolate] is a great example of a company that has a multi-disciplinary, multi-industry application. Systems-driven product development is right at the center point of the innovation cycle for every industry that works with complex mechanical or electro-mechanical systems. Our industry team was able to identify that this capability was common and needed across industries. They found a company that had the capability and was also strong in some of our targeted industries. So this is a natural match for us and will accelerate the execution of the strategies that our industry team has prioritized.

Chris: This acquisition isn’t happening in isolation. We’ve announced a few recently and over the past year. And of course our competition is in the game as well. What do you see as the biggest differences between what Siemens is looking to do through acquisition vs. our competition?

Chuck: In the last 12 months we’ve announced four significant acquisitions. The focus of our acquisitions is to fill out and extend the engineering capabilities that our customers expect from us – it’s to continue to fill out the core. With the acquisition of Vistagy, we’re now able to deliver advanced engineering products to the designers of airframes, automotive structure and wind turbines. These are advanced mechanical and electro-mechanical structures that past modeling techniques really couldn’t optimize because they weren’t able to properly take into account composites. By adding the Vistagy products to our portfolio, we’re now able to more fully support the core of what automotive, aerospace and energy customers are telling us they want to do.

The rationale behind the acquisition of Perfect Costing Solutions is much the same. When our customers invest in building detailed models inside Teamcenter, NX or Tecnomatix, they want to be able to ask those models questions. One of the principle questions that needs to be answered is “what’s this product going to cost when we go to manufacture it?” Perfect Costing is the expert in this field. They have the best algorithms when it comes to cost prediction.

It’s the same story with the acquisition of KineoCAM, just announced a few weeks ago. We get technology that can help with robotic planning, tool path planning and clash detection. All things that are “under the hood” so to speak, but that will help us further develop the core of what our customers expect to be able to do with our tools.

Now with [Chocolate], we get this connection from the coarse to fine development process. Many of our customers describe their product development using the V-model, which decomposes customer requirements into high level requirements, then into lower level subsystem and functional requirements and so on, down to the piece part level. The V-model also ensures that while you are decomposing requirements that you are also validating how the subsystems and components will interact. [Chocolate] allows us to optimize that entire flow.

Again, our acquisition strategy is to continue to build out around the core of our PLM solutions. That means ensuring that our customers have the breadth of tools required to create models which can be interrogated and produce answers they can use to make real decisions. If you go back to the first question you asked, it all ties back to supporting that immersive, decision support environment. It’s pretty easy to see how all of these support the idea of a fully immersive environment, complex models that are made simple for the engineer but with high enough fidelity to be able to ask questions, get answers and make decisions faster.

Chris: What should our customers infer from the acquisition of [Chocolate] about the focus of Siemens PLM Software on delivering a market leading simulation solution?

Chuck: Our customers are already aware that we have one of the world’s leading pre and post processing environment for finite element modeling. With NX and FEMAP, we have tools that sit on the desktops of the best engineers around the world. Also, with our acquisition of NASTRAN several years ago and the extensions we have made since then, we have developed the highest performance solver for stress, strain, noise and vibration. Our partners have taken that even further to include tools that solve thermal, coupled physics and kinematics. With [Chocolate] we are adding model based simulation and hybrid engineering to our simulation portfolio. Our customers should see this as a commitment to deliver tools that cover the entire simulation space. We are tying together the full environment from functional requirements, to logical models to the functional models into a complete whole. For prospects that may not be as familiar with what we’ve done in the simulation area, they should see that we’re intent on investing our own developers, analysts and engineers as well as our acquisition dollars into the simulation space.

Chris: [Chocolate]’s vision has been focused on what it calls “Hybrid Engineering” (combination of test/measurement data) and Model Based Systems Engineering. What about those concepts will be most interesting to Siemens PLM Software customers?

Chuck: They both make sense in the context of HD PLM. Our goal with all of the things we do is to make the virtual and physical environments really link up. The idea of having hardware in the loop to help make better predictive models is the future. We would love the virtual environment to give us a 100% accurate prediction of the physical world, but the fact of the matter is that there is a need to link data from physical components into the virtual model to make it as accurate as it needs to be to make real decisions. We see, just as [Chocolate] did, that the model based approach tied together with simulation and the test lab is really the only way to make high definition decisions early in the process before massive cost is committed.

I can’t wait to get involved with the [Chocolate] business in the coming months – you never forget your first “real” job. Even more exciting though is to see us making such a bold move that aligns so well with our vision. The virtual is becoming more real every day.

By now you’ve probably heard the news.  Either that or the Siemens PLM Blog is your first stop every morning.  For the few of you in that latter group, here’s the scoop: Siemens is at it again – we’ve announced another acquisition.  While I love all of the companies we’ve acquired over the past few years, this one has special significance to me.  The first “real” job I ever had when I got out of school was working for LMS in their North American HQ in Troy, Michigan, as a support engineer.  At the time LMS was mainly a test and measurement company with big customers in the automotive and aerospace industries.  Since then, LMS has grown to be a leading model based systems engineering and hybrid engineering firm with customers in every major manufacturing industry.

I sat down with Chuck Grindstaff earlier today to talk about the LMS acquisition.  Here are some highlights of our chat:

Chris:  At the Siemens PLM Software analyst conference last month you talked a lot about how we give our customers an immersive, decision support environment and the key role that intelligently integrated information plays in making that happen.  How does the LMS acquisition support that strategy?

Chuck:  The message at the analyst conference was all about helping our customers design their products from the very coarse, early levels – what we call model based design – and then ask those models questions that are tied to the final product performance down the road.  LMS is an expert in not only the front end design but following through all the way to the test lab.  The early models allow you to describe in a coarse fashion how things are supposed to work. Then you can refine those models, ask those models questions and optimize, going all the way to physical prototypes when those are necessary. For us, this fits directly with this idea of immersing our engineering community in a full virtual to physical design environment.  It’s something our customers appreciate today and will even more fully appreciate tomorrow.

Chris:  About 12 months ago we increased our focus on marketing, selling and delivering our solutions in an industry context. How does the acquisition of LMS support SPLM’s renewed attention to vertical industry solutions?

Chuck:  Our idea wasn’t really to revamp our approach to each customer and industry – we were already doing a pretty good job there.  The idea was to take it to another level. Our new Industries group is focused on finding common threads in an industry and across industries and then bringing those forward as a basis for us to either do our own development or to drive our acquisition strategy.  LMS is a great example of a company that has a multi-disciplinary, multi-industry application.  Systems-driven product development is right at the center point of the innovation cycle for every industry that works with complex mechanical or electro-mechanical systems.  Our industry team was able to identify that this capability was common and needed across industries.  They found a company that had the capability and was also strong in some of our targeted industries.  So this is a natural match for us and will accelerate the execution of the strategies that our industry team has prioritized.

Chris: This acquisition isn’t happening in isolation.  We’ve announced a few recently and over the past year.  And of course our competition is in the game as well.  What do you see as the biggest differences between what Siemens is looking to do through acquisition vs. our competition?

Chuck: In the last 12 months we’ve announced four significant acquisitions.  The focus of our acquisitions is to fill out and extend the engineering capabilities that our customers expect from us – it’s to continue to fill out the core.  With the acquisition of Vistagy, we’re now able to deliver advanced engineering products to the designers of airframes, automotive structure and wind turbines.  These are advanced mechanical and electro-mechanical structures that past modeling techniques really couldn’t optimize because they weren’t able to properly take into account composites.  By adding the Vistagy products to our portfolio, we’re now able to more fully support the core of what automotive, aerospace and energy customers are telling us they want to do.

The rationale behind the acquisition of Perfect Costing Solutions is much the same.  When our customers invest in building detailed models inside Teamcenter, NX or Tecnomatix, they want to be able to ask those models questions.  One of the principle questions that needs to be answered is “what’s this product going to cost when we go to manufacture it?”  Perfect Costing is the expert in this field.  They have the best algorithms when it comes to cost prediction.

It’s the same story with the acquisition of KineoCAM, just announced a few weeks ago.  We get technology that can help with robotic planning, tool path planning and clash detection.  All things that are “under the hood” so to speak, but that will help us further develop the core of what our customers expect to be able to do with our tools.

Now with LMS, we get this connection from the coarse to fine development process.  Many of our customers describe their product development using the V-model, which decomposes customer requirements into high level requirements, then into lower level subsystem and functional requirements and so on, down to the piece part level.  The V-model also ensures that while you are decomposing requirements that you are also validating how the subsystems and components will interact.  LMS allows us to optimize that entire flow.

Again, our acquisition strategy is to continue to build out around the core of our PLM solutions.  That means ensuring that our customers have the breadth of tools required to create models which can be interrogated and produce answers they can use to make real decisions.  If you go back to the first question you asked, it all ties back to supporting that immersive, decision support environment.  It’s pretty easy to see how all of these support the idea of a fully immersive environment, complex models that are made simple for the engineer but with high enough fidelity to be able to ask questions, get answers and make decisions faster.

Chris:  What should our customers infer from the acquisition of LMS about the focus of Siemens PLM Software on delivering a market leading simulation solution?

Chuck: Our customers are already aware that we have one of the world’s leading pre and post processing environment for finite element modeling.  With NX and FEMAP, we have tools that sit on the desktops of the best engineers around the world.  Also, with our acquisition of NASTRAN several years ago and the extensions we have made since then, we have developed the highest performance solver for stress, strain, noise and vibration.  Our partners have taken that even further to include tools that solve thermal, coupled physics and kinematics.  With LMS we are adding model based simulation and hybrid engineering to our simulation portfolio.  Our customers should see this as a commitment to deliver tools that cover the entire simulation space.  We are tying together the full environment from functional requirements, to logical models to the functional models into a complete whole.  For prospects that may not be as familiar with what we’ve done in the simulation area, they should see that we’re intent on investing our own developers, analysts and engineers as well as our acquisition dollars into the simulation space.

Chris: LMS’s vision has been focused on what it calls “Hybrid Engineering” (combination of test/measurement data) and Model Based Systems Engineering.  What about those concepts will be most interesting to Siemens PLM Software customers?

Chuck: They both make sense in the context of HD PLM.  Our goal with all of the things we do is to make the virtual and physical environments really link up.  The idea of having hardware in the loop to help make better predictive models is the future.  We would love the virtual environment to give us a 100% accurate prediction of the physical world, but the fact of the matter is that there is a need to link data from physical components into the virtual model to make it as accurate as it needs to be to make real decisions.  We see, just as LMS did, that the model based approach tied together with simulation and the test lab is really the only way to make high definition decisions early in the process before massive cost is committed.

I can’t wait to get involved with the LMS business in the coming months – you never forget your first “real” job.  Even more exciting though is to see us making such a bold move that aligns so well with our vision.  The virtual is becoming more real every day.